Martin Lewis has advised UK consumers not to worry excessively about their credit score when switching cashback credit cards to secure better rewards. Speaking on his BBC podcast, the money-saving expert addressed concerns from a listener whose current card's cashback rate had significantly dropped after five years.
The listener, Alison, feared that closing old accounts and opening new ones could harm her credit rating, despite always paying off her balance in full. Lewis dismissed these fears, describing credit scoring as 'more art than science' and urging people not to get 'too hung up' about it. He noted that any negative impact would likely be short-term and not 'huge' in the long run.
Lewis explained that lenders focus on two main factors: debt ratio and credit utilisation. Since Alison does not carry debt, her debt ratio remains unaffected. Opening a new card could actually lower her credit utilisation ratio, potentially benefiting her score. He advised keeping unused cards closed if they offer no ongoing benefits, but warned against making such changes just before a major application, like a mortgage.
In a key point, Lewis argued that protecting a credit score should not prevent people from pursuing better deals. 'The whole point of having a credit score is to enable you to get the right form of credit,' he said, adding that avoiding a good cashback card to protect a score is 'false logic.' He recommended switching cards to maximise rewards, as long as balances are paid in full each month.
